GRAND RAPIDS, Mich. (WOOD) — You’ve fretted about the house down the street that has been vacant for a long time — the one that’s a target for trash and trouble. You’ve wondered who owns it. Target 8 investigators have found that it might belong to one of the biggest banks in the country — a leftover from the foreclosure crisis.

In the industry they call it “shadow inventory.” Homes that sit empty, sometimes for years. Experts say the longer houses are without heat and without people, the more they deteriorate and lower the value of neighboring homes.

“It’s an attractive nuisance when you have a longtime vacant house,” said Helen Lehman of New Development Corporation, a Grand Rapids nonprofit that rehabs houses and works to improve neighborhoods. “It’s the reason insurance companies don’t want to insure them. It’s the reason neighbors don’t want to live near them. There’s just nothing healthy about it.”

That’s the case at 558 Highland St. SE in Grand Rapids.

“The window’s been busted out and they had to board up,” said Jessica Skelton, who lives next door. “That window was replaced because someone threw a brick at it.”

Skelton told Target 8 strangers use the backyard to drink and do drugs. They try to kick in the doors and leave trash behind. She cleans it up.

A bank has owned the house for nearly four years.

“It shouldn’t be like this,” Skelton said. “It’s sad to see so many houses just rot away before a bank decides what they’re going to do with it.”

“It’s terrible, terrible,” said Linda Cardosa about the house down the block at 1541 Turner Ave. NW.

Flagstar Bank has owned it since 2009. Target 8 found it empty, with yellow tape stretched across the porch. What looks like a Grand Rapids city repair notice is taped to the front door it isn’t legible because it’s so old that the ink has faded. The door is padlocked but it’s not closed all the way.

A few blocks away at 1007 11th St. NW, a city repair order flaps in the breeze from the front door where an inspector taped it. It demands JPMorgan Chase fix siding, windows and a fence.

Next door, neighbor Roger Wylie told Target 8 the bank has owned the home for two and a half years and people keep trying to break into it.

“They send people over from the bank constantly and they do jobs on it, but it still looks like crap,” he said.

Target 8 wanted to find out how many empty houses are owned by banks and what affect the homes have on the neighborhoods where they’re located. Target 8 investigators narrowed their search to one community – the city of Grand Rapids – which has good online resources. We searched assessor records under the names of as many banks as we could think of and browsed Kent County foreclosure records online to find names of other lenders and ran them through the assessor database.

That search found 86 homes across the city that have been owned by banks for more than a year – and some much longer.

55 were foreclosed in 2013

16 were foreclosed in 2012

12 were foreclosed in 2011

2 were foreclosed in 2009

1 was foreclosed in 2007

Of the homes, only 17 had for-sale signs.

Sitting empty for even a short time invites damage. That is the case at 919 Adams St. SE, which has sat vacant for only a few months. David Allen with the Kent County Land Bank Authority found water flooding the house after pipes burst in the cold weather.

“I was sad,” he said. “It was a beautiful house in great condition.”

Allen said red tape is to blame and he tried to warn the bank, Wells Fargo, but said “the bank couldn’t authorize the winterization until they got authorization from FHA.”

The pipe break didn’t wait.

Wells Fargo Vice President Tyler Smith told Target 8 it’s that kind of red tape that keeps foreclosed houses in the bank’s hands longer than anyone wants. He added that investors often own the houses and the banks have to get approvals for repairs, which creates a time-consuming “back and forth.”

The same thing occurs when FHA insures a mortgage. The bank has to hand over the house to the U.S. Department of Housing and Urban Development which will then put it on the market.

But first, the bank has to get it into good condition. More approvals and bids are needed while the clock keeps ticking.

“I’m not convinced that’s where the pokiness happens,” said Helen Lehman of New Development Corporation. “I’m convinced that it’s with the larger banks that have too big a portfolio and they don’t have the departments set up to do this. Banks were never meant to be landlords. They were never meant to be owners of vacant property. They just don’t know how to do it. There needs to be a system with some accountability, with some deadlines.”

A Flagstar spokeswoman, Susan Ferguson, told Target 8 that banks were overwhelmed by the foreclosure crisis and are gradually working their way out.

Ferguson said Flagstar added staff and outsourced claims in an effort to work through the backlog of homes and are “committed to getting it wrapped up soon.”

“I don’t know that we would find a deliberate or malicious intent on the part of any particular bank,” said Jonathan Bradford, who runs Inner City Christian Federation in Grand Rapids, which has rebuilt whole blocks of homes and put low-income people into them.

But he said that quickly moving foreclosed houses back into use has “never been a priority” for the major lenders.

“With the volume of foreclosures that happened, being dumped upon a system that was never sufficient in the first place, properties are going to get lost,” Bradford said. “Properties are going to be overlooked and forgotten.”

Such is the case at 124 Graceland St. NE which JPMorgan Chase foreclosed three years ago. It was a house the Kent County Land Bank’s David Allen saw and got interested in.

“It wasn’t even on their books,” he told Target 8. “It wasn’t until I called them that they actually found it in some obscure record.”

But it was no secret to the neighbors. While Target 8 took pictures of the place, several of them came out of their homes onto the snowy street to state how fed up they are.

“We have to sit here and look at it everyday,” said Diane Ensley. “We have to wonder, ‘Is it going to get burned down or are we going to have people living in it that don’t belong there?’”

The house had unpainted porch posts and roofing tar splattered on the siding.

Olivia Foster, who lives across the street, said she wants to move next year and is concerned that potential buyers will look at the empty house and decide to find a different neighborhood.

JPMorgan Chase didn’t get back to Target 8 and the other banks wouldn’t talk about specific houses.

If you have a vacant house in your neighborhood, you can easily find out who owns it. In Kent County, the government website AccessKent has a property lookup. So do most local tax assessors with owner info available online or with a phone call.

After that, neighbors are basically on their own to tussle with the banks.

“I think it’s important for neighbors to join together and do what we’re doing,” Lehman said.

Her advice? Call and write the banks.

“Just start getting crabby about it,” she said.

Lehman, Bradford and Allen all say their organizations can help by working with the banks and cutting red tape to get empty houses fixed and sold.

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